Abstract

This study proposes a comprehensive disclosure index to measure the extent of disclosure of accountability information in statutory bodies’ annual reports. The index is driven by the public accountability paradigm which establishes that a wide range of information need to be provided to various stakeholders. It is developed primarily based on a comprehensive review of the public sector disclosure literature, various reporting requirements and guidelines and a review of existing reporting practices. A comprehensive disclosure index which may be referred to as Accountability Disclosure Index (ADI) comprising 110 disclosure items was constructed. It consists of five categories (overview, governance, financial, performance and others) and 24 subcategories and adopted a binary and unweighted method of scoring. It has passed through the internal validity, reliability and pilot test.The index-either in its full form or with minor modifications-can be employed by future researchers across other equivalent semi-governmental bodies. The index can also be used by public managers to self-assess their disclosure level and benchmark against other entities. Also, stakeholders can evaluate the level of disclosure of statutory bodies, which in turn suggests the level of transparency and accountability discharged by these entities.

Keywords:

Accountability, annual report, disclosure, index, statutory bodies, public sector, transparency,

References

1. Abu Bakar, N.B., Z. Saleh and M.H.S. Mohamad, 2011. Enhancing Malaysian public sector transparency and accountability: Lessons and issues. Eur. J. Econ. Financ. Admin. Sci., 31: 133-145.
   
2. Abu Hasan, H. and N.B. Abu Bakar, 2015. Public Sector Accounting. In: Idris, A., S. Moghavvemi and G. Musa (Eds.), Selected Theories in Social Science Research. UM Press, Kuala Lumpur, pp: 137-150.
   
3. Australian National Audit Office, 1997. Applying Principles and Practice of Corporate Governance in Budget Funded Agencies. Discussion Paper, Australia.
   
4. Banks, W. and M. Nelson, 1994. Financial disclosures by Ontario universities: 1988-1993. J. Int. Account. Audit. Tax., 3(2): 287-305.
   CrossRef    
5. Banks, W., J. Fisher and M. Nelson, 1997. University accountability in England, wales, and Northern Ireland: 1992-1994. J. Int. Account. Audit. Tax., 6(2): 211-226.
   CrossRef    
6. Blanco, H., J. Lennard and S. Lamontagne, 2011. Annual reporting and accountability by municipalities in Canada: An empirical investigation*. Account. Perspect., 10(3): 195-224.
   
7. Bolívar, M.P.R., C.C. Perez and A.M. López-Hernández, 2007. E-Government and public financial reporting: The case of Spanish regional governments. Am. Rev. Public Adm., 37(2): 142-177.
   CrossRef    
8. Botosan, C.A., 1997. Disclosure level and the cost of equity capital. Account. Rev., 72(3): 323-349.
   
9. Bowrey, G., 2008. Keeping up appearances: The quest for governance legitimacy. Account. Accountabil. Perform., 14(1): 1-31.
   
10. Boyne, G. and J. Law, 1991. Accountability and local authority annual reports: The case of Welsh district councils. Financ. Accountabil. Manage., 7(3): 179-194.
    
11. Broadhurst, W.H., 1993. University Accountability: A strengthened framework. The Task Force on University Accountability, Toronto.
    
12. Burritt, R.L. and S. Welch, 1997. Annual reports of Australian Commonwealth authorities: An analysis of their environmental disclosures. Abacus, 33: 69-87.
    CrossRef    
13. CAUBO, 1984. The guide to accounting principles, practices and standards of disclosure for universities and colleges of Canada. Canadian Association of University Business Officers (CAUBO), Ottawa.
    
14. Cheng, R.H., 1992. An empirical analysis of theories on factors influencing state government accounting disclosure. J. Account. Public Pol., 11(1): 1-42.
    CrossRef    
15. Christensen, M. and P. Skærbæk, 2007. Framing and overflowing of public sector accountability innovations: A comparative study of reporting practices. Account. Audit. Accountabil. J., 20(1): 101-132.
    CrossRef    
16. Clarke, D.P., S.L. Hrasky and C.G.T. Tan, 2009. Voluntary narrative disclosures by local governments: A comparative analysis of the textual complexity of mayoral and chairpersons' letters in annual reports. Aust. J. Publ. Admin., 68(2): 194-207.
    CrossRef    
17. Cooke, T.E., 1989. Disclosure in the corporate annual reports of Swedish companies. Account. Bus. Res., 19(74): 113-124.
    CrossRef    
18. Cooke, T.E., 1991. An assessment of voluntary disclosure in the annual reports of Japanese corporations. Int. J. Account., 26: 174-189.
    
19. Cooke, T.E. and R.S.O. Wallace, 1989. Global surveys of corporate disclosure practices and audit firms: A review essay. Account. Bus. Res., 20(77): 47-57.
    CrossRef    
20. Coy, D. and K. Dixon, 2004. The public accountability index: Crafting A parametric disclosure index for annual reports. Brit. Account. Rev., 36(1): 79-106.
    CrossRef    
21. Coy, D., G. Tower and K. Dixon, 1993b. Quantifying the quality of tertiary education annual reports. Account. Financ., 33(2): 121-129.
    CrossRef    
22. Coy, D., G. Tower and K. Dixon, 1994. Public sector reform in New Zealand: The progress of tertiary education annual reports, 1990-92. Financ. Account. Manage., 10(3): 253-261.
    CrossRef    
23. Coy, D., M. Fischer and T. Gordon, 2001. Public accountability: A new paradigm for college and university annual reports. Crit. Perspect. Account., 12(1): 1-31.
    CrossRef    
24. Coy, D.V., K. Dixon and G. Tower, 1993a. The 1992 Annual Reports of Tertiary Education Institutions: Quality, Timeliness and Distribution. Working Paper No. 18, University of Waikato, Hamilton, New Zealand.
    
25. CVCP, 1984. Guidance on Recommended Accounting Practice in UK Universities. Committee of Vice-Chancellors and Principals (CVCP), London.
    
26. CVCP, 1985. Report of the Steering Committee for Efficiency Studies in Universities (the 'Jarrat Report'). Committee of Vice-Chancellors and Principals (CVCP), London.
    
27. Dixon, K., D. Coy and G. Tower, 1991. External reporting by New Zealand universities 1985-1989: Improving accountability. Financ. Accountabil. Manage., 7(3): 159-178.
    CrossRef    
28. Ferlie, E. and C. Pollitt, 2005. The Oxford Handbook of Public Management. Oxford University Press, Oxford.
    PMCid:PMC1466894    
29. Firth, M., 1980. Raising finance and firms' corporate reporting policies. Abacus, 16(2): 100-115.
    CrossRef    
30. Gandía, J.L. and M.C. Archidona, 2008. Determinants of web site information by Spanish city councils. Online Inform. Rev., 32(1): 35-57.
    CrossRef    
31. Gibbins, M., A.J. Richardson and J. Waterhouse, 1992. The management of financial disclosure: Theory and perspectives. Canadian Certified General Accountants' Research Foundation, Vancouver.
    
32. Gibson, R. and J. Guthrie, 1995. Recent environmental disclosures in annual reports of Australian public and private sector organisations. Account. Forum, 19(2): 111-127.
    
33. Giroux, G., 1989. Political interests and governmental accounting disclosure. J. Account. Public Pol., 8(3): 199-217.
    CrossRef    
34. Gordon, T., M. Fischer, D. Malone and G. Tower, 2002. A comparative empirical examination of extent of disclosure by private and public colleges and universities in the United States. J. Account. Public Pol., 21(3): 235-275.
    CrossRef    
35. Gore, A.K., 2004. The effects of GAAP regulation and bond market interaction on local government disclosure. J. Account. Public Pol., 23(1): 23-52.
    CrossRef    
36. Gray, R. and J. Haslam, 1990. External reporting by UK universities: An exploratory study of accounting change. Financ. Accountabil. Manage., 6(1): 51-72.
    CrossRef    
37. Greiling, D. and K. Spraul, 2010. Accountability and the challenges of information disclosure. Public Admin. Quart., 34(3): 338-377.
    
38. Guthrie, J., 1993. Australian public business enterprises: Analysis of changing accounting, auditing and accountability regimes. Financ. Accountabil. Manage., 9(2): 101-114.
    CrossRef    
39. Herawaty, M. and Z. Hoque, 2007. Disclosure in the annual reports of Australian government departments: A research note. J. Account. Organ. Change, 3: 147-168.
    CrossRef    
40. Ho, S.S.M. and K.S. Wong, 2001. A study of the relationship between corporate governance structures and the extent of voluntary disclosure. J. Int. Account. Audit. Tax., 10(2): 139-156.
    CrossRef    
41. Hofstede, G.J., 2003. Transparency in Netchains. In: Harnos, Z., M. Herdon and T.B. Wiwczaroski (Eds.), Information Technology for a Better Agri-food Sector, Environment and Rural Living. Proceeding of EFITA 2003 Conference. Debrecen, June 17-29.
    
42. Hoque, Z., 2008. Measuring and reporting public sector outputs/outcomes: Exploratory evidence from Australia. Int. J. Public Sector Manage., 21(5): 468-493.
    CrossRef    
43. Hyndman, N.S. and R. Anderson, 1995. The use of performance information in external reporting: An empirical study of UK executive agencies. Finan. Accountabil. Manage., 11(1): 1-17.
    CrossRef    
44. IFAC Public Sector Committee, 2001. Governance in the Public Sector: A Governing Body Perspective. International Federation of Accountants, New York.
    
45. Ijiri, Y., 1983. On the accountability-based conceptual framework of accounting. J. Account. Public Pol., 2(2): 75-81.
    CrossRef    
46. Ingram, R.W. and D.V. DeJong, 1987. The effect of regulation on local government disclosure practices. J. Account. Public Pol., 6(4): 245-270.
    CrossRef    
47. Ismail, S. and N.B. Abu Bakar, 2011. Reporting practices of Malaysian public universities: The extent of accountability disclosure. Afr. J. Bus. Manag., 5(15): 6366-6376.
    
48. Joseph, C., 2010. Content analysis of sustainability reporting on Malaysian local authority websites. J. Admin. Sci., 7: 101-125.
    
49. Joseph, C., 2011. Factors influencing the non-disclosure of sustainability information on Malaysian district councils' websites within an institutional theory framework. Soc. Manage. Res. J., 8: 1-13.
    
50. Joseph, C. and R. Taplin, 2012. Local government website sustainability reporting: A mimicry perspective. Soc. Responsibil. J., 8(3): 363-372.
    CrossRef    
51. Kim, P.S., 2009. Enhancing public accountability for developing countries: Major constraints and strategies. Aust. J. Publ. Admin., 68: S89-S100.
    CrossRef    
52. Lee, J. and G. Fisher, 2004. Infrastructure assets disclosure in Australian public sector annual reports. Account. Forum, 28(4): 349-368.
    CrossRef    
53. Lim, S. and J. Mckinnon, 1993. Voluntary disclosure by NSW statutory authorities: The influence of political visibility. J. Account. Public Pol., 12(3): 189-216.
    CrossRef    
54. Lynch, B., 2010. An examination of environmental reporting by Australian state government departments. Account. Forum, 34(1): 32-45.
    CrossRef    
55. Mack, J. and C. Ryan, 2006. Reflections on the theoretical underpinnings of the general-purpose financial reports of Australian government departments. Account. Audit. Accountabil. J., 19(4): 592-612.
    CrossRef    
56. Marcuccio, M. and I. Steccolini, 2005. Social and environmental reporting in local authorities. Public Manag. Rev., 7(2): 155-176.
    CrossRef    
57. Marcuccio, M. and I. Steccolini, 2009. Patterns of voluntary extended performance reporting in Italian local authorities. Int. J. Public Sector Manage., 22: 146-167.
    CrossRef    
58. Marston, C.L. and P.J. Shrives, 1991. The use of disclosure indices in accounting research: A review article. Brit. Account. Rev., 23(3): 195-210.
    CrossRef    
59. Mccracken, G., 1988. The Long Interview. SAGE Publications, Newbury Park, California.
    CrossRef    PMCid:PMC1711505    
60. Monfardini, P., 2010. Accountability in the new public sector: A comparative case study. Int. J. Public Sector Manage., 23: 632-646.
    CrossRef    
61. Mussari, R. and P. Monfardini, 2010. Practices of social reporting in public sector and non-profit organizations. Public Manag. Rev., 12(4): 487-492.
    CrossRef    
62. Nelson, M., W. Banks and J. Fisher, 2003. Improved accountability disclosures by Canadian universities. Can. Account. Perspect., 2: 77-107.
    CrossRef    
63. Nelson, M., J., Fisher, G. Tower and W. Banks, 1997. A comparison of university accountability in Australia and Canada. J. Contemp. Issues Bus. Gov., 3(2): 36-46.
    
64. Nichol, E. and D. Taylor, 2001. Accountability and performance reporting in the public accounts of Malaysian government. J. Contemp. Issues Bus. Gov., 7: 33-41.
    
65. Pallot, J., 1992. Elements of a theoretical framework for public sector accounting. Account. Audit. Accountabil. J., 5(1): 38-59.
    CrossRef    
66. Perez, C.C., M.P.R. Bolívar and A.M. López Hernández, 2008. e-Government process and incentives for online public financial information. Online Inform. Rev., 32: 379-400.
    CrossRef    
67. Pérez, C.C. and A.M. López-Hernández, 2009. Governmental financial transparency in MERCOSUR member countries. Int. Rev. Adm. Sci., 75: 169-181.
    CrossRef    
68. Power, M., 1996. Making things auditable. Account. Organ. Soc., 21(2-3): 289-315.
    CrossRef    
69. Prime Minister's Department, 2004. General circular letter no. 6 of 2004: Amendment to the general circular letter no. 1 of 1995 on preparation of annual summary report of the financial status and performance of federal statutory bodies. Percetakan Nasional Malaysia, Kuala Lumpur.
    
70. Prime Minister's Department, 2005. Development administration circular no. 2 of 2005: Guideline on establishing Key Performance Indicators (KPI) and implementing performance assessment at government agency. Percetakan Nasional Malaysia, Kuala Lumpur.
    
71. Queensland Audit Office, 1999. Corporate Governance: Beyond Compliance, a Review of Certain Government Departments. Queensland Audit Office, Brisbane.
    
72. Ranson, S., 2003. Public accountability in the age of neo-liberal governance. J. Educ. Policy, 18(5): 459-480.
    CrossRef' target='_blank'>CrossRef    
73. Robbins, W.A. and K.R. Austin, 1986. Disclosure quality in governmental financial reports: An assessment of the appropriateness of a compound measure. J. Account. Res., 24(2): 412-421.
    CrossRef    
74. Romzek, B.S., 2000. Dynamics of public sector accountability in an era of reform. Int. Rev. Adm. Sci., 66(1): 21-44.
    CrossRef    
75. Ryan, C. and C. Ng, 2000. Public sector corporate governance disclosures: An examination of annual reporting practices in Queensland. Aust. J. Publ. Admin., 59(2): 11-23.
    CrossRef    
76. Ryan, C.M., K.L. Dunstan and J. Brown, 2002a. The value of public sector annual reports and annual reporting awards in organisational legitimacy. Account. Audit. Perform., 8(1): 61-76.
    
77. Ryan, C., T. Stanley and M. Nelson, 2002b. Accountability disclosures by Queensland local government councils: 1997-1999. Finan. Accountabil. Manage., 18: 261-289.
    CrossRef    
78. Samaratunge, R., Q. Alam and J. Teicher, 2008. Public sector reforms and accountability: The case of south and Southeast Asia. Public Manag. Rev., 10(1): 101-126.
    CrossRef    
79. Schneider, A. and G. Samkin, 2008. Intellectual capital reporting by the New Zealand local government sector. J. Intellect. Capital, 9(3): 456-486.
    CrossRef    
80. Singh, D.R. and K. Bhargava, 1978. Quality of disclosure in the public sector enterprises. Vikalpa, 3(4): 257-264.
    CrossRef    
81. Singhvi, S.S. and H.B. Desai, 1972. The quality of corporate financial disclosure: A reply. Account. Rev., 47(3): 585-586.
    
82. Steenkamp, N. and D. Northcott, 2007. Content analysis in accounting research: The practical challenges. Aust. Account. Rev., 17(43): 12-25.
    CrossRef    
83. Taylor, D. and M. Rosair, 2000. The effects of participating parties, the public and size on government departments' accountability disclosures in annual reports. Account. Accountabil. Perform., 6: 77-97.
    
84. Taylor, D.W. and K. Pincus, 1999. Core Concepts of Accounting Information: A New Introduction to Accounting. McGraw Hill, Sydney.
    
85. Tooley, S. and J. Guthrie, 2007. Reporting performance by New Zealand secondary schools: An analysis of disclosures. Finan. Accountabil. Manage., 23(4): 351-374.
    CrossRef    
86. Tooley, S., J. Hooks and N. Basnan, 2010. Performance reporting by Malaysian local authorities: Identifying stakeholder needs. Finan. Accountabil. Manage., 26(2): 103-133.
    CrossRef    
87. Treasury, 2007. Treasury Circular No. 4 of 2007: Guideline for Preparation and Presentation of Annual Reports and Financial Statements of Statutory Bodies. Ministry of Finance Malaysia, Kuala Lumpur.
    
88. Treasury, 2008. Treasury Circular No. 10 of 2008: Establishment, Role and Responsibilities of Financial Management and Accounting Committee in Federal Government Agencies. Ministry of Finance Malaysia, Kuala Lumpur.
    
89. Wall, A. and G. Martin, 2003. The disclosure of key performance indicators in the public sector: How Irish organizations are performing. Public Manag. Rev., 5(4): 491-509.
    CrossRef    
90. Wallace, R.S.O., K. Naser and A. Mora, 1994. The relationship between the comprehensiveness of corporate annual reports and firm characteristics in Spain. Account. Bus. Res., 25(97): 41-53.
    CrossRef    
91. Wei, T.L., H. Davey and D. Coy, 2008. A disclosure index to measure the quality of annual reporting by museums in New Zealand and the UK. J. Appl. Account. Res., 9(1): 29-51.
    CrossRef    

Competing interests

The authors have no competing interests.

Open Access Policy

This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Copyright

The authors have no competing interests.